Money Management Tips for Entrepreneurs

Frequently covers crowdfunding, the sharing economy and social entrepreneurship.

March 20, 2014

The peer-to-peer, online-only lending platform Lending Club is moving into small-business lending, the San Francisco-based company announced today.

Lending Club says its expansion into the small-business loan market will be welcome because of unmet loan demand. “Bigger businesses can get large loans from banks, but smaller businesses are not well served by existing banking products from traditional banks,” Lending Club CEO Renaud Laplanche said in a statement released today.

The company says its new business loan platform will make credit "more available and more affordable" to small businesses.

Businesses that apply and are approved can get loans of between $15,000 to $100,000 with fixed interest rates starting at 5.9 percent and terms of one to five years. Loans are repaid with a fixed monthly payment, but there are no penalties for paying off a loan early.

Lending Club is launching the program with a select group of accredited investors and large institutions experienced in making commercial loans. While it may consider making the program available to retail investors as well, the company says it needs to gather enough data to know what the repayment and default rates will be.